HSBC Q3 profit jumps 76 percent

HSBC’s pre-tax profit jumped 76 percent on year in the third quarter, the British bank said Monday, as chief executive Noel Quinn declared ‘the lows of recent quarters are behind us’ and announced a US$2 billion share buyback.

In a statement to the Hong Kong stock exchange the banking giant reported pre-tax profit in July-September had jumped to US$5.4 billion.

Profit after tax came in at US$4.2 billion, up US$2.2 billion from the same period last year.

The bank said it logged profit in all regions during the third quarter, with Asia contributing US$3.3 billion to the overall reported profit.

The Asia-reliant lender had a tumultuous 2020 as its fortunes took a hammering from both the coronavirus and simmering geopolitical tensions.

Quinn has since overseen a dramatic restructuring, slashing the bank’s workforce by about 35,000 and refocusing on its most profitable areas in Asia and the Middle East, a tactic he said was now paying dividends.

“While we retain a cautious outlook on the external risk environment, we believe that the lows of recent quarters are behind us,” Quinn wrote in a note attached to the bank’s third-quarter results.

“This confidence, together with our strong capital position, enables us to announce a share buyback of up to $2 billion, which we expect to commence shortly,” he added.

HSBC makes 90 percent of its profit in Asia, with China and Hong Kong the major drivers of growth.

In February it published a new strategy laying out plans to redouble its attempt to seize more of the Asian market.

Weighed down by low interest rates, it is planning to seek out more fee-based income, especially wealth management for Asia’s increasingly affluent.

Earlier this year the bank sold its 90 branches in the United States and completed a long-running disposal of its unprofitable French retail business. (Additional reporting by AFP)